New Home Purchase – The Contract
If you decide to make an offer on a new home, you and the seller sign the purchase offer, and from that moment on you enter into a binding agreement. However it is advisable for you not to make any purchasing offers unless you get to know the contract’s clauses properly. For a good deal on a new house you should make sure you have a good real estate agent at your disposal who you can stay in touch with for the duration of the negotiations with the seller. Whatever the clauses in the contract, they can always be altered, but only before signing it. There are, however, some standard clauses that should be found in any home purchase contract.
The earnest money deposit. It is not really necessary. However, if this deposit is not included in your offer, the seller may think that you are not really that committed to buying that certain house. Usually an earnest money deposit is an amount of money equal to 1 to 5 percent of the total purchase price ,and often times this deposit may get bigger after all inspections have been completed.
Inspection contingency clauses. To make sure that everything is in order, and the house is the way you want it to be, you need to ask for a contingency time period so you can get a professional inspector, as well as yourself, to inspect the house for any possible problems that need to be fixed by the seller before you agree with the purchasing contract. This is done just in case the seller refuses to take care of the problems you want fixed, so you can easily cancel the purchase and have your earnest money deposit back.
Mortgage finance contingency clause. If you are one of the many people that need a mortgage loan because you cannot afford to pay the entire amount of money from the beginning, then you should have this clause inside your contract. This clause makes sure you have the appropriate amount of time to secure your financial requirements from the lender which you require for buying your new home. The lender will most certainly ask for information on the property and how much its worth, so if anything goes wrong and the loan will not be approved, this clause makes sure you can cancel the purchase and get your earnest deposit back.
Personal property clause. If you want to keep any of the personal items that are already on the property such as TV antennas, screens, appliances, carpets or windows coverings, then you should include this clause in your contract.
Last but not least, there is a clause called the all-inclusive weasel clause which enables your financial adviser or attorney to re-inspect the contract after it has been signed. This last clause is not really necessary, yet some people like to include it because it may help them in case they overlooked anything on the initial inspection.
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